Continued Reliance on Coal Will Lead to Higher Utility Bills

Submitted by Amy Guinan on November 4, 2010

With growing foreign demand, diminishing “economically-feasible” coal reserves, and rising mining costs, since October of 2009, the price for a one- month contract for Wyoming’s Powder River Basin coal, a main Colorado supplier, has risen 67 percent to $13.80 a ton.  Powder River Basin coal has historically been priced at $5 a ton.

With almost 60 percent of Colorado’s electricity generated from coal-fired power plants, the increasing cost of coal will likely continue to be reflected in rate-payers electricity bills.  Xcel Energy, for instance, has had three rate increases in the last 4 years in part to pay for construction of the utilities’ newest coal-fired power plant, Unit III, in Pueblo, CO.

And current electricity prices don’t take into account the impact of possible legislation to curb emissions of carbon dioxide at the federal and state level. “Legislation that’s now stalled in Congress could have placed up to a $17 charge on a ton of carbon emissions. Burning a ton of coal creates about 2.8 tons of carbon dioxide.”

For more information, visit the CEA Coal Supply Constraints Report: Coal_Supply_Constraints_CEA and the Denver Post article on rising coal costs.

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